You have a business idea, you’re willing to take a risk, you’re just about to commit but there’s one problem – you don’t have much money to start. On the surface that seems like a big problem but it’s not. You have the choice of either reducing expenses or using someone else’s money which I will discuss here.
First off, the amount of money you will need depends on the type of business you choose to start. If you don’t have much money you will want to stay away from businesses that require large amounts of upfront money. The idea here is to start small, prove your business model and then think about going bigger as you grow.
Typical startup costs include licenses or permits, supplies, equipment, office space, software subscriptions, marketing and operating expenses, legal fees and freelancers. Look through each of those expenses and ask yourself if you absolutely need them. You may think you need office space but in reality you can use coffee shops for meetings. Somethings are mandatory and others may not be ideal to cheap out on but use your judgment and keep expenses as low as you can. Start-up is all about getting sales, so know that your time and capabilities will be what make the business a success. There’s a lot of benefit in this bootstrapping method. You get to understand your customer better than any survey could ever do which will allow you to test and tweak your business model on the go.
Another way to grow with almost no money is to use other people’s money but that requires you to have a trusted reputation. There are many ways to raise capital – even if you don’t have much yourself. First you will have to put together a pitch deck that basically describes the opportunity you are presenting. Your pitch deck can be a powerpoint presentation that breaks down 9 categories starting with the problem you are fixing, the solution, the market size of the opportunity, the product you are creating, the timeline, the team, the competition, the financials and the amount of money being raised.
Once you have your pitch deck you can crowd fund your idea, reach out to family and friends, look into government grants, bank loan options, pitch angel investors or venture capitalists.
Wether you choose to bootstrap your business by lowering all expenses to their minimum and starting small or raising money from the start you should be able to reduce your personal financial investment to almost nothing. If you truly believe in your idea no hurdle stands in the way.
Also published on Medium.